In recent years it has become increasingly common to hear news of a product failure that has led to a product recall or remediation programme. Recent examples of how companies have been impacted by product failure include:
Such incidents have the potential to cause severe financial, operational and reputational problems for an organisation as it manages the repercussions and remediation.
Consumer reactions and regulatory responses to a product failure can result in lost customer revenues and substantial reputational damage. News of the failure can spread extremely quickly on social media, and at the same time regulators’ expectations are increasing. As a result, effective and rapid situational response and crisis management need to be a strategic priority.
While companies deal with a certain level of recalls in the ordinary course of business, they may be less equipped to deal with the aftermath of a significant product failure.
Rapidly and effectively responding to a significant product failure can be challenging. Some of the common obstacles include:
These challenges highlight the complexities in managing the fallout of a significant product failure and rapid mobilisation of an effective recall or remediation operation.
Taking definitive action within the first 48 hours is critical. In our experience, many companies are unprepared and lose time during this vital period. They focus on organising a remediation team and obtaining the necessary information for senior individuals to enable decision making and prevent further distribution of the affected product. Consequently, the product failure issue grows unabated. Below, we identify the four pillars of successful product failure response.
We can set up and run a crisis ‘war room’ to lead your crisis response, or shore up your existing strategic and operational capacity when needed. We can help prepare or review your crisis response strategy, governance, crisis communications and stakeholder management plans. We can mobilise within hours to provide operational, regulatory and legal support, as well as technical analysis.
Our dedicated customer management teams provide you with ‘burst capacity’ and/or longer term support for customer-facing functions.
We can set up a service to contact and liaise with your customers directly.
If the failure leads to a large number of customer claims for remediation, PwC’s claims management solution has been designed to be fully customisable and scalable to help you at your moment of need. It can be deployed either ‘on-premises’, hosted securely by PwC or hosted by you in-house.
We have trained and experienced staff who can step in to rapidly scale up your team to deal with customer challenges, to ensure regulatory compliance and to resolve issues and maintain relationships.
When crisis hits, you need to know you’ve got the capacity, technology and resilience to cope. That’s where we come in. We can help you develop and implement a recovery plan.
Our senior crisis experts, experienced in managing large-scale and complex remediation exercises relating to product failure, means that you rapidly get clarity and control, giving you the confidence to make the right decisions.
When an you are faced with a crisis or investigation, a successful outcome is dependent on your ability to access all relevant data. Identifying structured data sources in a complex environment calls for particular technical capabilities and technology tools. Our specialist team are experts in capturing data, from ERP systems to trading and point of sale systems.
When crisis hits you, understanding large and complex datasets can be difficult, yet a successful outcome is dependent on your ability to analyse and draw meaningful conclusions. Our skilled data scientists are experts in analytics and visual representation of data. Using the latest technology, we make your complex data easy to use and understand – ensuring that you can identify and distil key findings as quickly as possible.
We can help you evaluate your options around third party disputes and insurance claims in the wake of product failure, and work with you to consider potential outcomes and resolution mechanisms.
A product failure or recall situation can be extremely complex and highly disruptive. PwC has the expertise and capacity to rapidly scale up your response to limit the financial, regulatory, and reputational impact in such circumstances. To find out more about how we can help, please get in touch with our dedicated team.
Lack of compliance with product standards and regulations resulting from changes in the manufacturing process, complicated by loss of corporate knowledge.
We used machine learning techniques across a significant volume of data to automatically classify operational behaviours and product specifications which, when analysed chronologically, would identify points of change. Techniques such as factorisation, 3D visualisation and classification models provided insight and support for the client to identify cases for remediation, allowing them to confidently respond to regulators.
Product quality falsification across dozens of products that are components to finished goods in many industries.
PwC provided assistance with 1) identification and forensic collection of pertinent information for the regulatory inquiry and litigation; and 2) supply chain analysis to identify where a product was shipped to, as well as identify finished goods that could contain the client’s product.
Leveraging technologies such as graph analytics, PwC was able to quickly provide a view into the complex global supply chain of the organisation and help focus investigative efforts.
Civil and criminal litigation in relation to a safety incident caused by the quality of building materials made by the manufacturer.
PwC conducted complex data analytics to identify and cleanse relevant information to the manufacturer. This included the testing and supply of the building materials to help the client understand what went wrong. This information included financial system data, shared drives, and emails, as well as non-traditional data sources such as plant manufacturing data.
PwC also helped the client to assess if the issues were widespread.